22nd ama conference - auditors-censors.com...2016/05/09 · publication of vat committee guidelines...

1 Standing for trust and integrity

22ND AMA CONFERENCE

Hilde Blomme

FEE Deputy Chief Executive

Palma de Mallorca, 18 October 2013


Topics for discussion

Context

About FEE

The new European Union Accounting Directive

of June 2013

A few words on the European Debate on Audit

EU drives changes in Taxation

Questions

3

2

1

4

5

6


CONTEXT

1


Busy year(s) @ FEE …

Accounting

IASB governance (EFRAG)

Review of IFRS regulation (upcoming)

New accounting directive (June 2013)

Non-financial information (proposed directive April

2013)

EC corporate governance action plan

Public sector reporting (IPSASs / EPSASs)


…Busiest years ever in all fields

of FEE activities

Tax policy

VAT, CCCTB, FTT…

Fight against fraud…and aggressive planning

Anti-Money Laundering (Feb. 2013 proposed

directive and upcoming EC report on fight

against corruption)

Recognition of professional qualifications

EU-US trade talks

… and more !


… And the most important

regulatory challenges Audit policy is critical (but it is one of 15 areas of

work of FEE)

It is important to represent the profession in all

matters of impact and build reputation as a

responsible European public policy stakeholder


All times high public opinion and

media scrutiny


Small and Medium sized Practices:

BIG on the agenda

Priority on delivering real value to Member Bodies and their

practitioners, better responding to their needs and

enhancing FEE visibility

Rolling out new structure and assessing its functioning

FEE SMP Forum = Ambassadors Task Force + Champions

Network

Sharing best practices across Member Bodies

Enhancing external engagement and considering joint-

projects and alliances (UEAPME, ESBA,

BUSINESSEUROPE)

Fostering particular topics and own projects (guides, events)


Introduction: About FEE

2


Federating the European Profession

45 professional institutes of accountants

33 European countries, including all 28 EU Member States


Adding Value to Members

FEE:

Combines a membership of over 700.000 professional accountants

Represents the whole profession

In public practice, small, mid-tier and large accountancy firms,

businesses of all sizes, public sector and education

Identifies, analyses and influences relevant public policy developments

Makes representations to EU Institutions and international

organisations

Promotes co-operation and gathering and sharing of good practices

among FEE Members

Cooperates with other European associations

e.g. BUSINESSEUROPE, UEAPME, ESBA, ECODA, ECGI, EBF,

etc.


Governance


Advancing Members’ activities and

providing thought-leadership

Corporate Reporting

Accounting

Banks

Insurance

Auditing SMP Forum

Sustainability

Company Law and

Corporate Governance

Professional Ethics

and Competences

Capital Markets

Tax

Public Sector

IAASB EDs Subgroup

TF Auditor Selection

TF Future of Audit

TF Auditor

Communication

Anti-Money

Laundering


See www.fee.be

http://www.fee.be/


Accounting Directive

3


EC Accounting Directive

of 26 June 2013

Combining and amending the existing 4th and 7th

Accounting Directives

Amending the existing Transparency Directive for

listed entities

To be transposed in EU Member States by mid

2015 (20 July 2015)

FEE input at all stages, successful in substantial

improvements to proposals


Accounting Directive –Threshold criteria (1/7)

In million EUR Small Medium Large

Previous New Previous New Previous New

Balance

Sheet <4.4 4><6 <17.5 <20 >17.5 >20

Net

Turnover <8.8 8><12 <35 <40 >35 >40

Average

number of

employees

<50 <50 <250 <250 >250 >250

Accounting and auditing thresholds : the entity moves up a

category if exceeding 2 of the 3 thresholds for 2 years

Member State option in the small entity threshold range


Micro-entities (2/7)

Micros are entities below two of the following criteria:

Balance Sheet total: EUR 350.000

Net turnover: EUR 700.000

Average staff: 10 employees

Member State option to use no, some or all exemptions

Exemptions:

Recognition of ‘Prepayments and Accrued Income’ and ‘Accruals

and Deferred Income’ but only for charges other than cost of raw

material and consumables, value adjustments, staff costs & tax

Notes to the accounts

Annual reports

Permit simplified Balance Sheet and Profit&Loss Account

Micros still subject to keeping records (business

transactions & financial position)


Accounting Directive – Content (3/7)

General financial reporting principles

Substance over form principle: Member State option to

exempt all companies from its application

Materiality principle: Member State option to limit its

application to presentation and disclosure

Alternative measurement basis of fair value

Member State option to permit or require fair value as an

alternative measurement basis

Cash flow statements

No requirements to prepare cash flow statements for any

type of companies



Limited disclosure requirements for small companies

Member State option to require the following disclosures:

• Off-balance sheet transactions

• Post balance sheet items

• Related party transactions

Member State option for limited disclosures required by domestic

tax legislation

The use of IFRS for SMEs

The restriction to write off goodwill removed by a Member State

option to determine write off period between 5 - 10 years

Other obstacle retained (presentation of unpaid subscribed

capital)

The IASB asked to remove the remaining obstacle, but will not



Country By Country reporting

Scope: large companies and PIEs active in the extractive

or forestry industries

Threshold for disclosure per any payment to governments

of EUR 100,000

Annual disclosure in a public report, outside the annual

financial statements

No requirement for auditor’s involvement

Country by country reporting on tax issues: following

Council agreement, expected to be dealt with in EC

Proposal on Non-Financial Information reporting



Audit requirement for small companies

No audit requirements for small companies on EU

level, possible on national level

Explicitly stated: Member States are not prevented

from imposing an audit on small companies

Going concern assumption

Statement in the notes on the conformity of accounting

policies with the going concern concept



Auditor’s opinion on the management report

Auditor shall express an opinion on:

Whether the management report is consistent with the

financial statements

Whether the management report has been prepared in

accordance with the applicable legal requirements

Based on knowledge and understanding of the undertaking

and its environment obtained in the course of the audit,

whether he has identified material misstatements in the

management report and shall give an indication of the

nature of any such misstatements.


European Debate on Audit

4


Work programme and timeline

Date Objective

[…]

COREPER 4 October 2013 Mandate received to start the trilogue

European

Parliament (EP) 4 February 2014 (Expected) Vote in Plenary

Objective :

Completing the Dossier before the elections for the EP

(i.e. end of March) and the subsequent new European

Commission (EC) in 2014,

However, if not successful, process likely to continue !


How the trilogue works

Sebastian Valentin

Bodu (EPP, RO)

Antonio Masip Hidalgo

(S&D, ES)

Alexandra Thein

(ALDE, DE)

Eva Lichtenberger

(The Greens/European

Free Alliance, SE)

Jiri Mastálka

(GUE/NGL, CZ)

Klaus-Heiner

Lehne

(EPP, DE)

Sajjad

Karim

(ECR, UK)

Commission Legal Services

Council

Legal

Services


Key battle grounds EP / EC / Council

Legal instrument: Directive vs Regulation

Definition of Public Interest Entity (PIE) (?)

Role of professional bodies (?)

Combination of MAFR and/or Tendering, Quality

Assessment, Joint Audit

List of prohibited non-audit services and audit-related &

other assurance services

Cap on non-audit services maintained or not? At which

level?

Public auditor’s reporting (?)

Supervision on EU level and role of ESMA


… on Key Battle Ground

Publication of Policy Statements (June 2011 & July 2012)

Communication to FEE Member Bodies about

• The discussions taken place in the EP and Council

• The technical parts, developing key arguments for or

against

Letters to and contacts with MEPs throughout the process

Letters to MS Representatives in July 2013 re NAS

Several contacts with Lithuanian Presidency

[…]

FEE Action


EU drives changes in taxation

5


Fighting tax fraud and tax avoidance

EC initiatives

Action Plan with 34 measures

Recommendation on aggressive tax planning

Recommendation on minimum standards on good

governance in tax matters for third countries

Proposed Directive on automatic exchange of information

EC Platform on Tax Good Governance

OECD report and action plan on Base Erosion and Profit

Shifting (BEPS); developing a global standard on

international tax cooperation and transparency

G 20 finance ministers endorse automatic exchange of

information

FEE fosters debate on responsible taxation


The future of VAT

assessment

current VAT rate

structures

proposal on new

VAT rate structure

proposal for

definitive regime

review and analysis of destination

principle

proposals for broadening the tax base – including proposal on public bodies

proposal for

standardised VAT

return

broadening the one-stop-shop

arrangement

introduction of mini

one-stop-shop

arrangement

“Art.12” Report

report back on anti-

fraud measures

quick-reaction

mechanism

feasibility of cross-border audit team and broadening of automated access to

information

further investigation of new tax collection methods

Publication of VAT Committee guidelines and explanatory notes on new legislation before the new rules enter into force

Creation of an EU VAT web portal

tripartite EU VAT

forum

study on

standardardised

VAT return standardisation of other VAT obligations, such as registration and invoicing

2012 2013 2014 2015 2016 - 2020

The reform continues with a series of EC initiatives over the next years


Questions

6

22nd ama conference - auditors-censors.com...2016/05/09 · publication of vat committee guidelines...

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